Primary Care at What Price? The Role of Consumer Information Under Quality Uncertainty

This dissertation exploits cross-sectional variation in social heterogeneity, regulatory environment and local amenities to identify the effects of consumer information on the market for primary care when price and quality are uncertain - including the impact of additional providers. If patients depend on word-of-mouth to assess a clinic’s perceived value or doctor’s reputed skill, how do they choose a provider in the face of ever-expanding options? How do these search costs affect the type of providers who enter the market and the amount of money they charge? Using unique data on patient and provider characteristics, local geodemographic indicators, and corresponding confidence in medical quality, I show that increasing provider density reduces firm-level demand elasticity and allows higher monopoly prices in rural India. I also find that social fragmentation combined with lax regulation further exacerbate rising primary care prices and increase the underlying incidence of illness, contributing to significant regional variations in overall outpatient expenditures.